Programmatic Television Buying: All You Need to Know

It’s no secret that advertising is the most important way to promote a product, service, or brand. It’s a way that brands can creatively display products and services to an intended audience. The most common is display advertising, which is seen in all forms of media, especially television. There two different types of display advertising: traditional and programmatic. If you’re looking to build your brand and expand your audience, you should consider programmatic television buying. It’s okay if you don’t know what that is, or have little idea about it, you will soon become an expert in programmatic advertising!

In this article, you will learn the differences between the two forms of display advertising, what programmatic TV advertising is, how to buy it, and the importance of programmatic advertising in the media.

programmatic tv advertising

Display Advertising in the Media 

To understand the importance of programmatic TV advertising, you should be aware that there are two different forms of display advertising: traditional and programmatic. While there are pros and cons to each, I will explain the differences of each and how programmatic TV advertising will benefit you more in the long run.

Traditional Advertising

The buying process for traditional advertising is time-consuming and costly. Traditional advertising happens between the ad buyer and publisher and involves trading and negotiations. This can cause a huge risk of overpayment on the advertisers part. On top of creating a higher cost for the advertiser as a result of the lengthy buying process, this is not ideal. It’s also difficult to gather the data that’s scattered across media sources. This is not efficient and there are many causes for error.

Programmatic Advertising

Programmatic advertising is the process of automating the buying and selling of online advertising. It can be purchased immediately across an extensive number of sources. Real-time bidding, which is mentioned later in this article, also determines the price because it is based on demand for ad space. This eliminates all risk for over-payment. An algorithm then determines who will see the ad and where it will be placed, making the process simple and easy. Advertisers can optimize and adjust their campaign at any point because of its transparent, real-time reporting. This process is simple and cost effective, making it the best choice for ad placement. This is why you should consider programmatic television buying. 

programmatic tv buying

Programmatic TV Advertising

As explained above, programmatic advertising is clearly the best choice for ad placement in the media. But what about television? Well, this still applies. Programmatic TV advertising is a TV ad buy that uses data and automation to target consumers more efficiently. Specific audience targeting will help increase the value of advertising for TV networks, cable operators, buyers and vendors. When looking at the advantages and disadvantages of programmatic TV advertising, there’s nothing that should make an advertiser hesitate to adopt this new form of display advertising. 

Advantages to Programmatic TV Advertising

Of the different forms of media, television is one of the best ways to target a wide-scale audience. Planning, buying and measuring is also easier because data is automated and found in the same place. TV users can further benefit because their ads will be engaging to their likes or needs. A couple years ago, programmatic TV ad spending was at $1.7 billion. It was expected to reach $4.7 billion by the end of 2020. This shows how there is change in the way buyers and sellers go about purchasing advertising. 

Disadvantages of Programmatic TV Advertising

When it comes to the downfalls, there aren’t many in terms of choosing programmatic advertising. Because it’s relatively new, publishers, buyers, and sellers are slow to embrace changes in what already may be familiar to them. Although, like most advancements in technology, they will soon see how this can better their lives. 

Connected TV

Connected TV consists of any type of TV that can be connected to the Internet and can stream digital video at a viewer’s convenience. This is TV that doesn’t call for cable or pay-TV services, such as smart TVs, devices like Roku, and even gaming consoles like a PlayStation and or Xbox. Using programmatic TV advertising with connected TV allows advertisers to reach specific audiences. This is incredibly beneficial because an advertiser can be sure that purchasing ad placements will be directed towards the audience it’s intended for. This results in a more effective advertising strategy. 

Digital Out-of-Home Advertising (DOOH)

DOOH is another way that advertisers can target TV users with programmatic advertising that isn’t at home. Similar to the way that advertisers use connected TV, they can also target and place inventory (or ads) “out of the home” using programmatic advertising

When looking at DOOH targeting, there is a variety of information that advertisers look at. This includes proximity, behavior, venue, zip code, screen type, time of day or week, and even weather. It’s amazing how detailed the information advertisers receive using programmatic advertising. They hope that by specifying advertisements towards these things listed above, they will not only receive positive feedback, but viewers will also be engaged with what they are seeing. 

After selecting the target audience, advertisers must decide how they are going to display their advertisements. This can either be place-based or large format. Place-based inventory placement seeks to engage people at different places where groups tend to gather frequently. Large format is exactly how it sounds. Advertisers will place their ads on screens that can be seen at larger distances, such as in malls, restaurants, airports, and gyms. 

Regardless if an advertiser is utilizing connected TV or DOOH advertising, they must be familiar with their options when it comes to buying programmatic TV advertising. 

programmatic television buying

Buying Programmatic TV Advertising

Advertisers ultimately want to purchase advertising that is going to be the most effective. With connected TV and DOOH, it’s easier to get information such as demographics, geographical area, interests and watching history in order to strategically place ads. This will keep your audience engaged and offer you insights into how your ads are performing in terms of satisfaction and accuracy. 

Mentioned earlier, the process of buying programmatic TV advertising is fast and simple. It utilizes data insights and algorithms to serve ads to the right user at the right time, and at the right price. Although, to understand the ways to go about programmatic TV buying, you should note there are three different categories it can fall under. 

Real-Time Bidding (RTB)

Real-time bidding is the first and most common way you can go about purchasing programmatic TV advertising. It is also called open auction and happens in real-time. RTB is also open to anyone looking to purchase programmatic advertising. The price is often determined based on the supply and demand for ad space. This makes it extremely cost-effective. 

Private Marketplace (PMP)

Similar to RTB, private marketplace is an auction, but only selected advertisers may participate in it. To participate in this form of programmatic television buying, you will need to either be invited or apply to receive an invitation.

Programmatic Direct

The final way to purchase programmatic TV advertising is through programmatic direct. This process doesn’t consist of an auction, but a publisher selling ad space at a fixed cost per mille (cost per thousand impressions.) Selling based on impression is often ideal for publishers because it’s an inventory based product. 

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How Programmatic Advertising Reaches an Audience

When purchasing programmatic advertising, there are two resources that advertisers can find advantageous for programmatic audience reach

Demand Side Platform (DSP)

DSP is an automated buying platform where the purchase takes place and involves multiple ad exchanges. The platform offers advertisers to buy inventory across many different platforms. The inventory can be ads on mobile devices, video ads, and ads placed on websites. The two largest connected TV platforms- Amazon and Roku- operate their own DSPs.

Supply Side Platform (SSP)

SSP is more of an overarching platform. It allows media owners and advertisers to receive revenue and manage inventory. It gives advertisers more control and includes ad exchanges and DSPs. The ad exchanger is how the SSP puts out inventory that advertisers, agencies, and networks can buy through the DSP. Examples of SSPs include Google and Right Media, an online advertising company that offers media trade. 

The Power of Programmatic TV Advertising

It’s clear that programmatic advertising is taking the marketing world by storm. The efficient and effective way to purchase ad space allows advertisers to optimize their marketing strategy and make sure that their ads reach the intended audience. Programmatic advertising buying is also much more cost efficient; artificial intelligence eliminates error and the need for negotiation between the advertiser and the purchaser. As a result, the advertiser and TV viewers are satisfied. 

By now, you should know the basics of programmatic advertising and how this method of buying ad space can be incredibly beneficial in your marketing plan. If you are considering purchasing TV advertising, it’s likely that programmatic is the way to go. 

All in all, if you are still unsure about purchasing programmatic TV advertising, SEO Design Chicago has many experts who can help you. 

how to buy programmatic tv advertising

FAQs about Programmatic Television Buying:

  • What is the difference between a DSP and SSP? 
  • What are the downsides to traditional display advertising?
  • Is it hard to buy programmatic TV advertising?
  • What is programmatic advertising?
  • What are the advantages of programmatic advertising?

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